Functions of credit information companies (CIC) and membership to CIC
A Credit Information Company (CIC) is an independent third-party agency registered under CIC laws that collects financial data of individuals about their loans, credit cards, and other related information and shares it with its members, who generally happen to be banks and other financial institutions. The Credit Information Companies (Regulation) Act, 2005 (“CIC Act”), is…
Read article
What is credit scoring model: Factors considered for the calculation of scores
[This article explains about grading of borrowers who have a short credit history, how the credit score is calculated, factors considered for the calculation of scores, and the important aspects to see in the CIR] Credit scoring models are statistical tools that evaluate creditworthiness and determine the likelihood of default on credit obligations. The credit…
Read article
Overview: Distribution of Third-Party Products by Banks
The distribution of third-party products enables banks to diversify their revenue streams through fee-based services. In recent years, banks have evolved into comprehensive financial service providers, offering advisory and distribution services for various third-party products—commonly referred to as para-banking activities. In the banking context, third-party products refer to financial services and investment instruments not directly…
Read article
Bank’s Product Policy
The product policy of a bank refers to the comprehensive framework of principles and guidelines that govern the development, management, and delivery of the bank’s financial products and services. It serves as a strategic blueprint to ensure that offerings are aligned with customer needs, regulatory requirements, and the institution’s operational capabilities. This policy framework encompasses…
Read article
Product Management in Banks
Product management plays a pivotal role in the banking sector by ensuring that financial products and services are strategically developed, efficiently launched, and effectively managed. This discipline encompasses product discovery, planning, and development, with the aim of aligning offerings with both customer needs and institutional objectives. It involves gaining insights into customer behavior, conducting thorough…
Constraints Faced by Banks in New Product Development
Banks encounter a variety of constraints when developing new products, including technological limitations, fragmented innovation practices, challenges in testing and learning, sluggish performance analysis, regulatory compliance complexities, and resource limitations. For banks operating on legacy core systems, adopting innovative technologies or launching new products can be particularly difficult. These limitations often lead to delays in…
Read article